Dynamic Strategic Performance Measurement Systems: Balancing Empowerment and Alignment

This paper examines how substantial dynamism can be built into strategic performance measurement systems (SPMSs), and how such flexible and adaptable SPMSs can be used for strategic alignment. It draws on an in-depth case study of a successful global leader in the telecommunications industry. This research suggests that building substantial dynamism into SPMSs, and using such flexible and adaptable SPMSs for strategic alignment, may require companies to seek a balance between empowerment and alignment. To do so, they may need to adopt a combination of management practices that differ considerably from those prevalent for more stable SPMSs. Further, this research argues that subjectivity may be a central feature in a dynamic SPMS. Indeed, it could be essential both more effectively to empower managers to take primary responsibility for measures, and to provide them with sufficient leverage to account for changes in the external and internal contexts. The paper concludes by discussing theoretical and managerial implications.

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